Appeal No.	 EAT/741/97

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 13 October 1997

Before
THE HONOURABLE MR JUSTICE MORISON (PRESIDENT)
MR D CHADWICK
MR S M SPRINGER MBE

MR T SMITH	APPELLANT

SECRETARY OF STATE FOR TRADE AND INDUSTRY	RESPONDENT

Transcript of Proceedings

JUDGMENT

PRELIMINARY HEARING - EX PARTE

Revised

	APPEARANCES

For the Appellant	MR MICHAEL KALLIPETIS QC
(ELAAS)	

	MR JUSTICE MORISON (PRESIDENT):   The purpose of this hearing is to determine whether Mr Smith has an arguable point of law in respect of an appeal which he wishes to bring against a decision of an Industrial Tribunal held at Bristol on 7th May 1997. By their decision the Industrial Tribunal unanimously dismissed his application for a redundancy payment against the Secretary of State made under s.166 of the Employment Rights Act 1996.

	The application against the Secretary of State followed from the winding up of the appellant’s company called French Tarts Patisserie Ltd. The Industrial Tribunal referred to a number of factors which they took into account, they then referred to the case of Buchan and Ivey v Secretary of State for Employment [1997] IRLR 80 and concluded that the present case was largely indistinguishable from that case and they concluded:

“6 ... We think this is a classic case where the applicant was in fact simply running his own business through the medium of a limited company.”

	We have been persuaded by Mr Kallipetis QC, to whom we are extremely grateful, on behalf of the appellant that there are indeed two arguable points of law. The first is essentially that where a tribunal finds that a person enjoys a contract of employment with the company in question, is the Court entitled then to conclude that nonetheless the relationship between that person and the company is such as to deprive the status of the relationship of being that of employer and employee. In other words, is the decision in Ivey wrong when it was suggested that a person who is able to prevent his own dismissal from his position in the company by virtue of a controlling interest is outside the class of the persons intended to be protected by the Act; or to put it another way, is that a gloss on the wording of the statute.

	Secondly, it is, in our judgment, arguable that having regard to the existence of a contract of employment in this case, which as we understand it has not been asserted to have been a sham, the decision of the Industrial Tribunal was perverse in the sense that having regard to the findings of fact which they made they ought to have concluded and only concluded that he was working under a contract of employment or was an employee such as to attract the protection of s.166.

	On those two points, we are satisfied that there are arguable points to be made and we would wish the assistance of Counsel for the Secretary of State who no doubt will take part in the appeal when it comes on.

	There are two matters which we wish to deal with at this stage. The first is the finding of fact by the Industrial Tribunal that the appellant and his wife were the only directors. We are told that that is a misapprehension by the Industrial Tribunal and that Mr T A Smith was the sole director, but his wife was not a director. We imagine that that question can be readily sorted out by reference to company records and we would be prepared to substitute a new finding for that made by the tribunal if the parties in due time agree what the position was. If prior to the hearing they are unable to agree, then we may have to refer the matter back to the Industrial Tribunal Chairman for his comment, but we imagine that this is a matter of record rather than a matter for dispute.

	The second point relates to the term of the contract which refers to the working hours. We understand the tribunal in 2(g) to be summarising the contractual position as they understood it to be. The normal hours of work specified in Mr T A Smith’s contract of employment was “as required” and, therefore, it is right that he was not required to work “fixed hours” under his contract. We understand the Industrial Tribunal to have been making a finding that he worked as he was required to do by his contract of employment namely as necessary in the interests of the company. On that basis, we understand there to be no difficulty with this finding by the tribunal. But we should make it plain that we shall approach the appeal on that basis unless the Secretary of State wishes to maintain that the position is different, in which case in good time before the date fixed for the hearing, they will let us know and any dispute on facts can be referred back to the Chairman for his comments as appropriate. We do not consider, however, that Notes of Evidence are required in this case, because as we understand it, much of the evidence is not in dispute.

	This case raises a potentially important point of principle. It is to be listed as Category B to be heard by a High Court Judge. We will give leave to amend the Notice of Appeal to make the points that we have identified, such amendment to be made within 28 days. We are grateful to Mr Kallipetis for his indication that that should not prove a problem. We understand that Mr T A Smith will be obtaining Legal Aid. That may take some time, but we hope that that will not delay the filing of an amended Notice of Appeal. We shall liaise with the parties in relation to timing having regard to the possibility that the Ivey case may be within  the Court of Appeal, although our enquiries at the moment suggest that it is not.